How big insurance carriers are making big bucks

Hello. Dr. Keith Smith with you – Surgery Center of Oklahoma. Thank you for joining me.

I’d like to discuss a concept and an activity called ‘shared savings.’ This is the same as repricing, but I think it’s a little easier to understand, actually. Remember in our prior discussion of the $100 aspirin, how the big insurance carrier rode into the employer on a white horse, claiming they saved them all this money, then they claim a commission for this false savings, consistent with the contract that they have with the employer’s health plan.

Shared savings, I think, is the same thing. It’s easier to understand. I haven’t mentioned this phrase before, but I think it’s important. Shared savings, basically, is where a $100,000 bill is discounted to $20,000 and the employer, not having spent that $80,000 is very happy and they share part of that savings with whoever is administering their health plan. It basically works the same way.

These opportunities are not available to those administering health plans when they deal with entities like the Surgery Center of Oklahoma. Here, we say a knee arthroscopy is $3,740. That creates no opportunity for whoever is administering the health plan to share any savings because the price is what it is. There aren’t any discounts; that’s just the price. That’s one of the reasons why the big carriers don’t like to deal with us. They lose out on this opportunity to share in false savings. This activity represents a huge part of their revenue and I thought that this shared savings concept would help everyone understand the repricing of claims concept even better.